What is a commercial mortgage?
A commercial mortgage is a long-term loan secured against a commercial or semi-commercial property. They are used for two main purposes: owner-occupied (buying the premises your business operates from) or investment (buying a commercial property to let to tenants).
Can I get a commercial mortgage with a CCJ or adverse credit?
Yes. Specialist commercial mortgage lenders assess the strength of the business or the rental income from the property alongside the borrower's credit history. Adverse credit is one factor — the lender will look at the full picture.
Owner-occupied
Assessed on business trading history, profit, debt service ability, and the property value.
Investment
Assessed on rental income, tenant covenant strength, lease terms, void risk, and property value.
Semi-commercial
Mixed-use properties (e.g. flat above shop) assessed on blended basis — both residential and commercial income.
Portfolio
Multiple commercial properties assessed on overall portfolio performance and aggregate DSCR.
What affects commercial mortgage pricing?
Business strength
Trading history, profitability, and cash flow. A profitable business with 3+ years accounts demonstrates the ability to service the debt.
Property type and location
Prime commercial in strong locations is easier to fund at higher LTV. Secondary commercial or specialist property types require stronger overall applications.
LTV (loan to value)
Lower LTV improves pricing and opens more lender options. Adverse credit borrowers can improve their position significantly by offering larger deposits.
Adverse credit severity
Severity, recency, and whether markers are satisfied all affect lender appetite. Older, satisfied adverse with a demonstrably improving situation is viewed most favourably.
What is DSCR and why does it matter?
DSCR (Debt Service Coverage Ratio) is the key affordability metric for commercial mortgages. It measures whether the property income or business profit covers the mortgage payments. The formula is: Net Operating Income ÷ Annual Debt Service.
DSCR worked example: Annual commercial rent = £50,000. Annual mortgage payments = £38,000. DSCR = 50,000 ÷ 38,000 = 1.32x. Most lenders require a minimum DSCR of 1.25x–1.35x — this example just meets the threshold. A strong tenant covenant (e.g. a national retailer) can offset borrower adverse credit concerns.
Commercial mortgages are not regulated by the FCA. This means lenders have more flexibility to consider adverse credit — but it also means you have less consumer protection than on regulated residential products.
What types of commercial property can be funded?
Our lender panel covers a wide range of commercial property types: retail units and high street shops, office buildings and business parks, industrial units and warehouses, mixed-use buildings (including those with residential above commercial), licensed premises including pubs and restaurants, and healthcare and care home facilities.